Well there really isn't any such thing as a hot selling, low competitive niche. Hot selling markets are always the most competitive and the reason why drop-shopping in those markets isn't a good idea is because of the competition you face from large volume wholesale buyers. In fact, some wholesale suppliers are selling direct and at wholesale prices as well.
So if you're going to move into a hot selling market, then wholesale is most definitely the way to go.
If you want to stick to drop-shipping in those markets, then your only real option is to run with a bundled marketing technique. That can actually take a competitive disadvantage and turn it into an advantage in some instances. With bundling, the objective is to package 2 or 3 drop-shipped products together, from the same supplier if at all possible for ease of shipping.
What you do it make your profit on one item only, then sell the other items in the bundle at cost. This can then give you the price advantage over other's selling each item individually. You have to make sure that the items all compliment each other, no good throwing in two diamond rings and a fishing rod for example.
That's one technique that can get you an advantage with some customers, not all of course because most will only be looking for the single item, but if you can bundle smart, you can create sales.